Friday, February 16, 2018

If You Could Read My Mind, Love, What A Tale My Thoughts Would Tell...

ALS patient group unhappy with how $115 million raised by the Ice Bucket
Challenge is being spentPublished: Feb 16, 2018 8:19 a.m. ET MarketWatch

By Emma Court

The “Ice Bucket
Challenge” became a global phenomenon in the summer of 2014.

Participants lined up
to have a bucket of ice water poured over their heads, with videos spreading
virally across social media.

Everyone from
politicians to executives, athletes, rock stars and even elephants did it (sans
the ice), raising awareness of the neuromuscular disease amyotrophic lateral
sclerosis (ALS) and generating donations to the cause in the process.

Much of the money
raised, about $115 million, went to the nonprofit ALS Association, an
unprecedented amount of money for a U.S. nonprofit, of which only a small
percentage bring in revenue of more than $10 million a year.ALSA
was a financially sound charity long before the ice and its revenue engine far
surpassed that $10 million threshold.

But Matt Bellina, a
34-year-old Navy veteran with ALS, told MarketWatch that he and others are not
benefiting from the Ice Bucket Challenge donations that poured into the ALSA.

ALS causes loss of
muscle function over time and has no cure. And because most individuals with
the disease are killed by it within three to five years, time is everything, he
said.

The ALSA says it has
committed most of the Ice Bucket Challenge funds: about $96 million of $115
million, which includes multiyear grants for research projects that are
ongoing.The bigger issue is the net assets that they have accrued.If somebody hands you a bag with $115,000,000
and you are going to spend it all slowly, you don’t stick it under the mattress
until you eventually dole it all out. I believe that ALSA issued an rfp for
financial management services related to the cash before the end of 2014.The unspent cash is a revenue engine,
too.And ALSA was not going to stop
doing its annual walks and fundraising just because it had ice cash to spend.It had been a financially sound
not-for-profit and retained <$20 million in net assets for years.Why maintain five times that now?

But a group of about
40 ALS patients and caregivers called Terminally Persistent, which formed
through a private social media page and includes members from across the U.S.,
“would like to see a little more aggressive spending on research that’s
applicable to people living with ALS today,” Bellina, who spoke on behalf of
the group, said.

“Most people diagnosed with ALS tomorrow will be dead before
they could spend all that money,” he said, referring to the roughly $104
million in net assets the ALSA had as of its most recent financial statement. (The group makes annual reports, independent
auditor reports and IRS 990 forms available on its website.)

But the ALSA said it is spending the money, and trying to do so
in as transparent a way as possible.

The ALSA’s Ice Bucket Challenge-related spending has been
detailed prominently on its website and is regularly updated, a strategy
that has earned praise from nonprofit experts. The nonprofit also earns high
ratings from Charity Navigator, the largest evaluator and rater of nonprofits.This
honestly does not speak well for the ratings services. ALSA research spending
details are more like press releases. It’s difficult to sort out annual
expenditures and committed funds by project. Cumulative numbers and multi-year totals make
it next to impossible to normalize the dollars into something meaningful. I
spent hours a few months ago trying to relate funding announcements to their
990 research grants.It shouldn’t be
that hard if they want to fulfill the spirit of transparency in addition to the
letter of the transparency.Clarity is
what many of us seek.

“Some people expect we
should have spent $100 million in one year. I don’t think that’s realistic, but
I understand where it’s coming from, a place of hope,” said Calaneet Balas,
ALSA president and chief executive officer. “There’s a lot of money going out
the door but if you have ALS, it might not feel good enough.”ALSA’s
Chief Scientist used to have a nice development hook at the end of
presentations after she had highlighted a few projects – “For every project
you’ve seen tonight, we have ten more good projects that we are unable to fund.”I’ve not heard that line lately.Were it true, it seems to me that all the
cash would have been working in labs and clinics long before today.

Patient groups like
the ALSA, which aim to represent the sick, are widespread in the U.S. Though
these groups provide invaluable information and services, they have become
controversial because of close financial ties with industry and advocacy groups
that have helped get drugs approved.ALSA is not immune to this concern, and it
does relate to research that is supported.We have no clarity on donation amounts from ALSA’s industry
“partners.”We are glad to celebrate the
philanthropy of corporate donors, but it should also be clear and public
knowledge of the donation amounts made by any entity that has an interest in
selling goods or services to those with ALS.It’s simple.Get the information
out on the table.We can’t even figure
out if these “partnerships” affect which clinical trials ALSA promotes.I wish they would be more vigorous about
promoting all trials and not leave us with nagging questions about who gets the
special clinical trial publicity.

The ALSA, having
stumbled into a small-donations windfall, is in nearly the polar opposite
situation. But its financial good fortune raises a similarly pressing, and even
philosophical question: What is truly the best way to help patients?

Nonprofits typically
look to donors for direction on how to prioritize spending. Should ALSA not be looking to those with ALS?Individuals living with this beast and the
ticking clock are the reason ALSA exists. Donors, as kind and generous and
important as they may be, are not necessarily the best ones to come up with
bold and transformational ways to invest in ALS research. Donors and not-for-profits
may be among the most risk-averse folks on earth! But here, without particularly detailed
guidance, “there’s going to be this tension, a built-in conflict,” said Doug
White, a philanthropic and nonprofit adviser. “If the $115 million that was
raised cures ALS, everyone’s going to be happy. Lacking that very finite goal,
everyone’s going to say we should do x or y.”

Spending controversy

Bellina was working as
a pilot in the navy when his hand started cramping on the throttle, fingers
twitching. He started having balance issues, and knew something was wrong.

Bellina now lives in
Pennsylvania with his wife and three small boys. He gets around in a wheelchair
or walker, and needs his wife’s help to eat, bathe and get dressed.

ALS is a progressive
disease. For Bellina, it’s getting harder to talk, “and at some point I’m going
to be fully paralyzed,” he said. But he doesn’t see the ALSA’s attitude
reflecting that.

“There really is not a
sense of urgency,” he said.

Most of the ALSA’s
spending is on research, because that was the guidance the group got from
donors, “to the extent we were getting any communication,” (I was blocked forever from their facebook
wall for a polite 2014 post suggesting the money go to research)said Stephen Winthrop, who is chair of the ALSA’s 25-member
board and currently the only board member with ALS. The nonprofit made that
decision in fall 2014, as part of a five-year plan to spend the Ice Bucket
Challenge donations in full, he said.I believe that donor intent matters and that
the overwhelming majority of those thousands of individual ice bucket donors
intended their gifts to go to research.Note that the first $62,000,000+ of those wonderful spontaneous donations
that came in during the first weeks of the ice challenge were done so via an
online donation form that offered no means to restrict a donation to
research.Also, may all the donors,
including the widows who dumped ice and donated $50, see the five-year plan,
please?

It is currently
funding more than 150 research projects in eight countries, with projects
studying how to extend lives and improve quality of life, along with looking at
what causes ALS, identifying biomarkers to help treat the disease and more,
Balas said.

After research,
providing services to ALS patients and the community accounts for the
second-largest portion of the ALSA’s spending, according to its most recent
financial filing. Most of the group’s annual revenue “went back out,” said
Holly Ivel, director of data services at GuideStar, a nonprofit that aims to
bring more transparency to the sector, and who reviewed the ALSA’s most recent
financial statement.

Moreover, though she
noted that she is not a scientist, “I don’t know that accelerating the spending
necessarily produces faster results.”ALS research is risky, and we
know that most projects won’t result in a meaningful treatment.That’s a fact. We need to learn how to fail
faster so that we can learn faster.This
is not a disease where we are close to homing in on a single thing.We need to learn by failures so that we can discard
the wrong paths and make sense of the rest.

The ALSA does spend on
both long-term research and to relieve the suffering of individuals with ALS
today, Winthrop said. But it is “a bit of a Sophie’s choice,” he said, because
patients ask why more can’t be done for them. “The problem with that decision
in my opinion is that the money would be very well spent, it would alleviate a
lot of suffering, and we’d look up six months later, we’d have blown through
all that money and we’re no closer to the cure.”So,
if they go slowly, it won’t be perceived as blowing through the money… and we
may still not be any closer to a cure.

And while some in the
ALS community disagree with the five-year plan, “that’s not what everyone in
the ALS community is saying,” Winthrop noted.

This type of conflict
is fundamentally the purview of a nonprofit’s board, said Larry Lieberman,
chief operating officer at Charity Navigator, who noted that the ALSA is among
the highest-rated organizations that Charity Navigator evaluates.

“Beneficiaries are not
always donors. And both deserve a voice,” Lieberman said.This
statement troubles me a lot.Beneficiaries are families dealing with ALS.Theirs are THE voices that really matter.They deserve better than a pay-to-play system
where high net-worth donors who are vested in an organization set an agenda for
them. It’s difficult for major donors to admit that the organization has been
wrong and needs to change. They are not the ones who change paradigms.

Other ALS organizations
have spent Ice Bucket Challenge donations more quickly, though they received
far more limited funds.

The ALS Therapy
Development Institute, a nonprofit biotech that conducts ALS research, spent
“every single cent” of its $4 million in Ice Bucket Challenge donations within
15 months, primarily to expand participation in a new program and to advance a
drug in clinical trials, said ALS TDI’s Rob Goldstein, vice president of ALS
community engagement and chief marketing officer. (The ALS TDI has been a
recipient of ALSA grants.)

His organization did
so because “we thought we could apply that money in a quick amount of time to
advance the mission,” and many other ALS groups did too, Goldstein said.
“Urgency has to be at the core of everything you do.”

But “other nonprofits
may have a different way of allocating their resources, and that’s up to them,”
he said. “And it’s up to donors and the general public to decide if that’s what
they want to see.”

This isn’t the first time that the ALSA has been criticized in
conjunction with Ice Bucket Challenge donations. Back in 2014, the group was
slammed for trying to patent “ice bucket challenge” and “ALS ice bucket
challenge.”

More recently, in mid-2016, the nonprofit said that a new ALS
gene had been found thanks to proceeds from the Ice Bucket
Challenge.

But experts questioned
whether it was much of a discovery at all.

Two doctors told the publication HealthNewsReview that
the gene, called NEK1, had already been of interest in ALS, and that the
finding was merely an association with ALS, which is the case with many genes
for many diseases.

But Balas, who became
CEO and president of the ALSA last December, defended the research in an
interview with MarketWatch late last week. We
have red flag words that constantly come up in ALS research announcements – “breakthrough,”
“exciting,” “promising.”The more we
discover, the less we really know about the disease.The task ahead is enormous.That is the reason why we must not break our
arms patting ourselves on the back. We must move boldly with more and novel
research.

“What it highlighted
was we were able to show progress in a very short period of time from the Ice
Bucket dollars. In less than 24 months, we had four new genetic discoveries,
and that helps us create targets for therapies,” she said.So?

Clinical trial conflict

Terminally Persistent also objects to the ALSA not providing
funding to a biotech called BrainStorm Cell Therapeutics BCLI, -1.92% The biotech’s stem cell treatment is the
only ALS therapy currently in phase 3 trials, it told MarketWatch.

BrainStorm and the
ALSA discussed funding for the phase 3 trial, but the ALSA said it does not
fund that stage of clinical trials, both parties told MarketWatch.Fine,
but if that’s a new policy, they should have said so.It appears that they’ve used a high-tech
eraser since the BCLI question came up. The title of the Cytokinetics Phase 3 grant
they made in 2015-2017 has been tweaked to look less like a Phase 3 grant.The fact that they would retitle an old
announcement is revealing.

But Bellina, who owns
about $1,000 in BrainStorm stock, said the nonprofit was too set on a paradigm
that “we’re way out from finding a cure, so we have to keep the momentum going
and hopefully generations later we’ll find a cure.” (Bellina said he bought the
stock a while back based on research that impressed him.)Ok, we know that Bellina invested $1000 in Brainstorm.We know generally what ALSA has invested in
grants to therapy developers.We know
nothing about what ALSA has accepted from therapy developers who are investing in
ALSA.How about if everybody gets all investments out on the table as clearly as Bellina did with his $1000 and let’s
continue the conversation.

“As a result, when we
have these new and exciting treatments coming up, we don’t have the ability to
jump up and get involved, because that’s not the way their business has been
structured,” he said.

This is a fairly
common conflict for any kind of organization, but especially a nonprofit
focused on disease, White told MarketWatch.

“Any disease charity
has a tough road, because they have to balance the short term and long term,”
he said. “That’s especially true with disease organizations, because you want
to end the disease.”

In an interview with
MarketWatch, Balas said she didn’t know whether there was a connection between
BrainStorm and Terminally Persistent, but suggested that there was one.This
reflects the disrespect and marginalization that many have experienced when
they have challenged decisions at ALSA.It’s not new. There seems to be no sense there that individuals who seek
change can be independent and altruistic and well-informed when they disagree
with ALSA. There’s not a quid pro quo behind every group or individual. I don't know why they think that way.

Bellina, for his part,
said there is no connection, though he has spoken with BrainStorm, which
BrainStorm Chief Executive Chaim Lebovits confirmed.

As for Bellina, he
still thinks the ALSA does good work, especially his local chapter, which he’s
involved with.

But he says he’s
willing to fight for change, even if it makes him look like the bad guy,
criticizing a nonprofit that works on behalf of patients.

“I think they’re doing
more good than harm, but I think allowing them to get away with things that we
know are wrong is going to ultimately do more harm,” he said. “In other words,
the damage we’re doing to the organization is overall worth the trouble, in
order to push them to real transparency.”

BrainStorm shares have fallen 5.2% in the last 12 months, while
the S&P 500SPX, +0.54% has gained 14% and the Dow Jones
Industrial Average DJIA, +0.82% has gained 20%.